JD.com (9618.HK), opens new tab, shares jumped 12% in U.S. premarket trading on Wednesday after the Chinese online retailer reported fourth-quarter revenue above estimates and announced it would increase the size of its share repurchase program.
In the final three months of 2023, in which the largest annual Chinese shopping festival “Singles Day” was held, aggressive price cuts helped revive demand from consumers grappling with an uncertain economy.
China’s shaky economic growth, high youth unemployment and lower wages for office workers have led to consumers tightening their purse strings, driving retailers like JD.com to offer heavy discounts to support sales.
The company reported quarterly net revenue of 306.1 billion yuan ($42.52 billion), compared with analysts’ average estimate of 300.04 billion, according to LSEG data.
Some analysts believe JD.com’s popularity among cost-conscious buyers has grown over the quarter.
Analysts also said the “suspicious practices” that emerged in an internal audit of its Dada Nexus (DADA.O), opens new tab unit are unlikely to have had a sizeable impact on the company’s overall revenue, abating investor concerns.
JD.com said it will repurchase up to $3 billion worth of its shares, including American depository shares, over the next 36 months through March 2027.
Its U.S.-listed shares have fallen more than 26% so far this year after slumping more than 48% in 2023.
The company reported net income attributable to shareholders of 3.4 billion yuan, up more than 13% from 3 billion yuan a year earlier.
($1 = 7.1989 Chinese yuan renminbi)
